Neil McDonnell: Where is our pride?

It was galvanising. The Irish team rallied, Michael Kiernan dropped a goal in the dying minutes, game won.

Three decades before, one of our greatest civil servants had a similar moment upon taking over the Department of Finance in 1956. Realising the depth of the economic trouble faced by Ireland, he wrote the ‘First Programme for Economic Expansion’ and presented it to the Government in 1958.

He couldn’t use the unparliamentary language availed of by Fitzgerald on the rugby pitch, but he threw down just as galvanising a challenge to the old republican taoiseach Seán Lemass. He said if Ireland did not quickly change its economic policy to stop the rot of emigration, we should politely request the British to allow us back into the United Kingdom.

That did the trick. Ireland abandoned protectionism, opened the economy to trade, and invited foreign businesses in with attractive tax policies. The turn in our census figures was immediate.

Today, Ireland faces an entirely different set of challenges. Any finance minister in Europe would kill to have the problems Jack Chambers is suffering, having such a large surplus he has overseen yet another give-away budget.

But real dangers abound. We cannot assume the world will remain benign for Ireland in 2025.

At year-end, we are set for a return to a Fianna Fáil-Fine Gael government with Independents replacing the Greens.

There has been some berating of Sinn Féin, Labour, the Social Democrats, and other left-leaning parties for their failure to form a credible proposition for an alternative government. This is unfair on two counts.

Firstly, the Irish political spectrum is objectively and firmly to the left of centre. Pan-European analysis by the University Carlos III of Madrid shows Fianna Fáil and Fine Gael to be only marginally right of centre parties. All others represented in the Dáil were substantially left of centre, barring Aontú. More importantly, Ireland has one of the lowest degrees of political polarisation in Europe. This is defined by how spread the political parties in a country are by their position in the left-right scale and size. A lower degree of polarisation makes it more difficult for voters to discriminate between political candidates.

Secondly, and this is by no means an attack on the fourth estate, the majority of Ireland’s political and economic commentary comes from journalists who are themselves left-leaning. The significance of this is important when considering the fiscal mix of policies in the programme for Government.

If political manifestos are to be believed, we will have a very high degree of spend on the current side in the next administration. This is not a good thing, but to what extent will the Government be held to account for it by the press? Barring business journalists, the media clamour is for more, not less, current spending.

Our domestic view of our foreign policy is that we are an enlightened, peaceful polity, expressing a positive neutrality. In reality, EU neighbours see us as hypocritical, basking in the military and geographic shade of others, while being condescending and patronising to those who provide it.

We were able to get away with that in a post-Cold War world where conflict was far away. No longer.

The EU’s neighbourhood is becoming more kinetic and threatening at the very moment when all three traditional European powers are in deep crisis.

The French government has fallen, and the economy is in deep fiscal trouble due to out-of-control spending.

Germany is in trouble for precisely the opposite reason; extreme fiscal conservatism has crippled its investment in infrastructure and 21st-century industry. Its government has also fallen.

Britain remains in denial about the blow Brexit has struck to its economy, productivity, and society.

We may be lumbering to a negotiated armistice in Ukraine, but Ireland is going to have to stop talking out of both sides of its mouth on neutrality. We are, or we are not. Genuine neutrality comes with a price tag and requires social responsibility from citizens.

Aside from its invasion of Ukraine, Russia is intervening actively in the electoral politics of countries it considers within its sphere of influence. All this is happening when the US is going through one of its introspective bouts of isolationism. Time for Ireland to buy a pair of long trousers.

Some Americans are as concerned at recent developments as Europeans are.

In The Lessons of Tragedy, Statecraft and World Order, by Hal Brands and Charles Edel, the authors pose the philosophical question as to whether politicians who have not experienced conflict or war are capable of avoiding hubris and complacency and becoming overconfident.

Brands and Edel’s concerns about American politics are equally valid in consideration of our own.

It is only 10 years since the termination of the EU-International Monetary Fund programme in Ireland.

We walked blindly into a fiscal, property, and banking crisis that took livelihoods from tens of thousands of Irish people, increasing unemployment to 15% — a level not seen since the economic blight of the 80s. I spent six months on the dole in 2013, the same year my wife lost her job. Many seem to have forgotten how bad things got at that time. My family never has.

Yet the political establishment, opposition included, has fallen back into the spend baby spend pattern, while failing to get an adequate return on investment. At the same time, the Department of Finance has lost its Whitaker zeal, and has bet our future on the continued huge tax take from the multinational sector.

The incoming Government needs to take immediate corrective action in its first six months.

The Department of the Taoiseach needs to stop pretending that SMEs don’t matter to the Irish economy. This will require formal recognition of the SME sector on the Labour Employer Economic Forum.

Both our Vat rates must be reduced, not merely to save the hospitality sector, but because they are too high in EU terms.

The tax system must again be used to encourage the provision of rental accommodation. The progressive exit of small landlords from the rental market has coincided with record-high rent levels. We need to see the reintroduction of a scheme like Section 23 in 2925.

The minimum wage will rise by six times the current rate of inflation in January. This is unjustifiable and is unsustainable. In calculating the minimum wage, we must have regard to large number of high-earning public servants and multinational employees in our economy.

A key requirement in the provision of housing and infrastructure is reform of our legal system, which works as if it was developed by Charles Dickens, for the sole betterment of lawyers. We need a far more muscular minister and Department of Justice in the next Government to tackle this last unreformed sector in Ireland.

Our politicians and civil servants know what needs to be done. Where’s your fucking pride?

Neil McDonnell is the CEO of the Irish SME Association.